Self Assessment

As we enter the last quarter of the year, it could be time to start thinking about completing the 2023/2024 tax return. This year brings a few key changes to look out for, and the main ones are as follows:

Changes to rates/allowances

• Dividend allowance: reduced from £2,000 to £1,000.

• Capital gains tax annual exemption: reduced from £12,300 to £6,000.

• Scottish taxpayers – income tax rates: higher rate increased from 41% to 42%; top rate increased from 46% to 47%.

• National insurance contributions – class 2: increase in the weekly rate from £3.15 to £3.45.

• National insurance contributions – class 4: decrease in the main rate from 9.73% to 9%.

Basis period reform

The changes to the basis period rules impact continuing sole trader and partnership businesses that did not have an accounting period for the 2022/2023 tax year that ended between 31 March 2023 and 5 April 2023.

The 2023/2024 tax year is a transitional year and ‘transition profits’ will need to be included on the full versions of either the sole trader or partnership pages of the 2023/2024 tax return (i.e. pages SA103F or SA104F). Some businesses may need to prepare a second set of pages.

If overlap profits arose in a previous tax year then ‘overlap relief’ should be claimed (it may be necessary to contact HMRC for a note of the relief due). Once the ‘transition profits’ arising have been determined they may be spread over 5 tax years.

Coronavirus support payments

There are no longer boxes for coronavirus support payments. So the 2023/2024 tax return looks like it did pre-pandemic. (It is also worth noting that employees should only be claiming a deduction for work from home costs if they are required to work from home.)

Any questions? We’d be happy to help!